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Sifting the Karakum

As delegates from the four countries hoping to build a gas pipeline from Turkmenistan to South Asia met on February 11 in Islamabad, Pakistani media claimed that a deal is close. Several outlets reported that French energy major Total may lead the long-delayed project, providing much-needed know-how and capital.

Other than rumored ambivalence towards the Turkmenistan-Afghanistan-Pakistan-India pipeline project in Islamabad and Delhi, the lack of a major commercial investor has been a key obstacle for TAPI. Turkmenistan’s refusal to allow any outsider an equity stake in an upstream field has been another stumbling block, with India reportedly pressuring Turkmenistan on February 11 to change its mind.

But The Daily Times, a Pakistani newspaper, claims a deal is imminent. Citing an unnamed official in the Pakistani Ministry of Petroleum and Natural Resources, the newspaper clarified that Total would not be the owner of the pipeline – which is the privilege of a company created by the four countries called TAPI Ltd. – but would instead assist the Turkmen at the source:

Under a proposed deal, Total will help extract gas from Turkmenistan’s fields, which will be exported to Afghanistan, Pakistan and India. In return, the company will be paid a service fee in cash or in kind. Sources in the energy sector said that gas companies of the four countries have already established a company to build, own and operate the 1,800km TAPI natural gas pipeline. The four state-owned companies will hold an equal share in the pipeline operator.

Four months after announcing it would slash the amount of gas it buys from Turkmenistan and Uzbekistan, Russian energy behemoth Gazprom has revealed the extent which its imports from Central Asia will fall this year.

On February 3, Vice Chairman Alexander Medvedev told an investment summit in Hong Kong that this year Gazprom will import two-fifths of the 10 billion cubic meters (bcm) it imported from Turkmenistan in 2014; it will buy less than a quarter of the roughly 4.5 bcm it bought from Uzbekistan last year.

Medvedev said the decisions had the blessings of both Central Asian states, while boasting that his company came to the agreements from a position of strength.

“For Gazprom, thanks to investment in extraction and transport infrastructure, there is no technological necessity for the purchase of foreign gas,” Medvedev said in comments picked up by state-run RIA Novosti. “Gazprom is in the situation to guarantee both the domestic demand in any region of the Russian Federation, and the delivery of gas to our customers in Europe, and in the future, Asia, with our own resources.”

The announcement came just hours before Moscow said Foreign Minister Sergei Lavrov would make a rare stopover in Ashgabat.

Getting reliable economic information out of Turkmenistan is difficult at the best of times, so if the gas-rich country is on the verge of a crisis, the secretive leadership is unlikely to drop any hints.

But a number of recent reports suggest that the effect of falling energy prices is being magnified by limited official information.

Opposition-minded news websites Alternative News Turkmenistan and Chronicles of Turkmenistan have reported long queues stretching out of currency exchange bureaus in recent days. The panic, note both outlets, is based on a rumor that the manat is about to be significantly devalued again.

The manat already fell 19 percent on New Year’s Day, falling from 2.85 to 3.5 manats against the greenback. The rumors point to an alarming 4.5 to the dollar. According to the Chronicles of Turkmenistan:

In recent days queues have been forming at various banks from early in the morning. In the regions, only 40-45 people are able to obtain the dollars at each bank, even though the queues extend to 200 or more people. Then the [people in the queue] are informed that there are no more dollars for the rest of the day.

Passports are required at the point of exchange. Each person can obtain no more than $1,000 in a single day.

For a landlocked country, Turkmenistan is getting into the seafaring spirit: Ashgabat’s new showpiece ferry Berkarar has been shuttling its way around the Caspian Sea – defined by geographers as an inland lake – making trips to both Azerbaijan and Russia so far this year.

The ferry was built in the Uljanik Shipyard in Pula, Croatia – which has produced ferries for the Caspian littoral states since communist times – and delivered to the reclusive Central Asian country in December. Ashgabat has also commissioned a second, smaller ship, Bagtiyar, which is scheduled to arrive this summer. They carry both freight and passengers.

Azerbaijani newswire Trend.az gushed about Berkarar’s latest voyage, from Turkmenbashi to the Azerbaijani capital: “The ferry impresses with its dimensions; it has a length of 155.8 meters, width of 17.5 meters, and height of 12.2 meters,” Trend reported on January 14.

Berkarar can carry “56 trucks loaded with 40-foot containers,” according to News Central Asia’s detailed report on the vessel.

So, provided there are enough goods to fill them, the ferries could help expand regional trade across the contested waters of the Caspian.

A Turkish company is currently modernizing Turkmenistan’s Turkmenbashi port, a commission that is expected to finish in 2017.

A major Pakistani newspaper has argued that the long-stalled Turkmenistan-Afghanistan-Pakistan-India gas pipeline (TAPI) is unlikely to be built anytime soon. The link is increasingly vital to Turkmenistan’s ambitions of being an independent force in the regional gas market, and reducing its dependence on its main buyer, China.

But while all four countries have signed off on the project, there are a number of reasons it may not come to fruition, according to Dawn, one of Pakistan’s largest English dailies.

There had been excitement in recent months that after years of talk, TAPI was entering the business stage. On the back of a four-country steering committee assisted by the Asian Development Bank in November, Turkmen President Gurbanguly Berdymukhamedov noted in December that “there is now no doubt that [TAPI] will be realized, moreover in the very foreseeable future.” European major Total and Malaysia’s Petronas are rumored to be interested in building the pipeline.

But referring to the same steering committee meeting held in Ashgabat, Dawn notes the very earliest gas could be expected to flow is 2019, three years later than anticipated, and potentially too late for India.

Given this delay, India has indicated revisiting its plan to be a part of the project; whether it would really need the gas from Turkmenistan after 2018 is questionable because it is already a major player in the Singapore LNG futures trading.

Turkmenistan rang in the New Year by dramatically devaluing its national currency, the manat, and introducing a steep levy on the price of petrol.

The scale of the devaluation – comparable to the 19 percent devaluation of the tenge in Kazakhstan earlier in the year – comes as all Central Asian economies are feeling the downturn in Russia, where the ruble lost 45% of its value against the dollar in 2014. But it is still somewhat surprising because Turkmenistan’s is the region’s economy least dependent on exports to its former colonial master.

AFP reported January 1 that the Turkmen central bank had published a rate of 3.50 manats to the dollar, down from the 2.85 that had held since 2009—a devaluation of 18.6 percent. The government has not commented.

Noting that a liter of popular 95-octane petrol had also jumped overnight – from 0.62 manats to 1 – The Chronicles of Turkmenistan, a news blog run by Turkmen exiles, feared significant inflation would follow.

For 12 years, Tatyana Shikmuradova has wondered if her husband is alive or dead. Authorities in her country, Turkmenistan, have answered none of her queries.

Her husband, former Foreign Minister Boris Shikmuradov, was one of dozens arrested, charged, sentenced and jailed within days of a purported assassination attempt on former Turkmen dictator Saparmurat Niyazov on November 25, 2002. The New York Times characterized the show trials aired on Turkmenistan’s state-run television at the time as “the most chilling public witch hunt since Stalin.”

At his trial, Shikmuradov – whom the police claimed to have “picked up with drugs in his pockets” – admitted to being an “addict” and a “thug.” Sentenced to 25 years, Shikmuradov’s prison term was increased to life the day after his trial. His sentincing was clearly political, activists say.

“I need to know where my husband is,” Tatyana Shikmuradova pleads in a new video released by Human Rights Watch to mark the anniversary. “For the past 12 years now I haven’t been able to get any information.”

The video is part of the Prove They Are Alive campaign, which demands Turkmenistan provide proof of life of the missing, or admit they are dead. From Human Rights Watch’s statement:

A meeting of CIS government heads over the weekend came and went with little media attention, an indicator both of the lack of importance prime ministers are accorded in the former Soviet Union and of the organization’s general redundancy.

Conceived to keep the newly independent states of the former Soviet Union together in a loose confederation, the Commonwealth of Independent States (CIS) had lost much of its mojo even before one-time member Georgia departed in 2008 and fresher affiliations – such as the Shanghai Cooperation Organization and Moscow’s Eurasian Economic Union – began gathering geopolitical prominence.

The CIS now includes Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan and Uzbekistan as full members, with Turkmenistan and Ukraine as participants. As Russian President Vladimir Putin said in 2005, the organization is best conceived as “a civilized divorce” between former partners, in spite of periodic and half-hearted attempts to turn it into something more.

For that reason, even the CIS Summit of Heads of Government on November 21 and 22 in Ashgabat had a damp squib feel to it. Although Turkmen President Gurbanguly Berdymukhamedov was there to greet delegates and hold bilateral talks, the Turkmen, Azeri and Uzbek delegations were formally represented by their respective deputy prime ministers. Ukraine and Moldova, meanwhile, sent ambassadors to head up low-key delegations.

Iran, it seems, was calling Turkmenistan’s bluff earlier this summer when Tehran said it no longer needs gas from its northern neighbor. Now a top official says Tehran will keep buying.

That is good news for Turkmenistan, which is so dependent on its main gas customer, China, that it is starting to look like a client state.

Iran is committed to increasing its own domestic gas production to up to a billion cubic meters per day by 2017, a target one industry analyst thinks is possible but unlikely within such a tight timeframe. But supplying Iran’s northern regions with domestic gas is complicated by its lack of infrastructure. So, since 1997, Iran has bought gas from Turkmenistan to service its north, and sold its own gas abroad.

Deputy Oil Minister Hamid Reza Araqi said this week that his boss and Turkmen President Gurbanguly Berdymukhamedov had met in Ashgabat this month to hammer out a new purchase agreement. According to regional news agency AKIpress, the meeting happened November 7.

“The deal makes it possible to raise the amount imported from Turkmenistan in cold months of the winter; starting in the beginning of the current year, Turkmenistan has exported 24-25 million cubic meters of natural gas to Iran [daily],” said Araqi, in comments carried in English by Iran’s Mehr news agency on November 19.

The agreement contains a provision to increase this to 30 million cubic meters daily, he added.

With the arrival of November, the serfs trickle home from Turkmenistan’s cotton fields. But a culture of state employees being forced to labor in menial jobs continues throughout the year, says an annual monitoring report. As they wait for the fields to bloom again with “white gold,” low-skilled municipal workers such as janitors and security guards are obliged to do free housekeeping for Turkmen bureaucrats, and to travel to faraway cities to participate in cleanups for the state, the report alleges.

Turkmenistan’s Central Asian neighbor Uzbekistan is usually the focus of international flak for mobilizing its citizens – notably students – to harvest cotton each fall. But totalitarian Turkmenistan, which produces more cotton per person than Uzbekistan, is just as keen on exploiting its bloated public sector for field hands, according to the October 14 briefing, published by Alternative Turkmenistan News (ATN), a service run by Turkmen exiles who partner with Amnesty International and the Norwegian Helsinki Committee.

Drawing on domestic accounts, the second annual report provides an important insight into Turkmenistan’s labor market. It pays particular attention to Turkmenistan’s low-paid state employees who have limited means to defend their rights in a country where de facto unemployment is high and cowed government workers can be replaced easily.

About Sifting the Karakum

The Karakum, or "black sand" desert, covers 70 percent of Turkmenistan’s surface. Population is sparse there, with only one person per 2.5 miles. Rain might come once in a decade. Underneath this austere territory lies the ancient city of Merv, near today's Mary, whose ruins are still studied by scholars around the world, as well as a great deal of oil and gas, making Turkmenistan's reserves among the largest in the world.

Little of the country’s closed political system has changed since President Gurbanguly Berdymukhamedov succeeded long-time dictator Saparmurat Niyazov – the Turkmenbashi, or “father of all Turkmen” – in 2006. Civic activists continue to be harassed, detained, or forced to leave the country. All lines of power lead to the president, who maintains a harsh top-down management of subordinate officials who are constantly reprimanded, shuffled around, or dismissed for "shortcomings" and "negligence."

With so much of what happens in Turkmenistan hidden or deliberately suppressed, it is our hope to sift through what stories do emerge in domestic and international media, and attempt to see the true dimensions of a country whose impoverished people rarely see the benefits of their nation's tremendous wealth.

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